Argentine judicial rulings on banking fraud liability

Argentine courts have issued rulings holding financial institutions liable for damages resulting from cybercrime and fraudulent activities targeting customers.

In one instance, a court ruled that Banco Patagonia was responsible for a fraud in Bariloche where scammers posing as YPF representatives obtained personal information to secure an unauthorized loan. The court declared the credit null and ordered the bank to return deducted funds with interest and pay punitive damages due to security deficiencies.

In a separate appellate ruling, the Second Chamber of Appeals in La Plata upheld an order for Banco de la Provincia de Buenos Aires to indemnify a victim of a phishing scam. The court mandated the payment of 5 million pesos in moral and punitive damages, plus the restitution of US$ 1,661. The ruling emphasized that the bank failed to implement sufficient monitoring to detect atypical transactions, noting that ‘the delivery of keys under deception does not automatically exempt the bank from its responsibility’ because institutions must possess tools to prevent such fraud.

In a related decision, the Second Chamber of Appeals in Civil and Commercial Matters of La Plata upheld a ruling against Banco Provincia involving a 40-year-old victim defrauded in November 2022. After being redirected from a legitimate billing inquiry to a fraudulent Twitter account, the victim was manipulated into providing home banking credentials and security tokens. This allowed attackers to liquidate US dollar savings and transfer approximately $278,500 to third-party accounts. The court found the bank’s security mechanisms insufficient to interrupt the atypical transactions, which were completed in under 15 minutes. The bank was ordered to pay $5 million pesos in moral and punitive damages, alongside the restitution of US$ 1,661 with 6% annual interest.